INCOME-
GROWTH
TRUST
[PHOTOGRAPHIC MONTAGE]
FROM OUR FAMILY TO YOURS: THE INTELLIGENT CREATION OF WEALTH.
ANNUAL REPORT
and Investment Performance
Review for the Year Ended
September 30, 1999
[LOGO]
--------------------------
Income-Growth
Trust(TM)
--------------------------
<PAGE>
November 22, 1999
Dear Fellow Shareholders:
I am pleased to provide you with the annual report for Heritage
Income-Growth Trust (the "Fund") for the fiscal year ended September 30, 1999.
For this period, your Fund had a total return of +6.14%, +5.32% and +5.32% on
Class A, Class B and Class C shares, respectively.*
During your Fund's most recent fiscal year, the trend we have been
reporting to you of large capitalization stocks outperforming smaller and mid
cap stocks continued. Further, the growth versus value performance dichotomy,
after a brief shift earlier this year, has returned. In recent months,
technology stocks, which generally have the highest price-to-earnings ratios in
the market, were one of the only areas in the market where investors have made
money. Against this backdrop, your Fund had a difficult time keeping up with
market averages. During your Fund's fiscal year, the market cap weighted
Standard & Poor's 500 Composite Stock Price Index returned almost 28% while the
unweighted Value Line Index gained only about 9%.
As we have discussed in previous letters, your Fund is designed to provide
investors with an opportunity to participate in the long term positive returns
of the stock market while offering a smoother ride than they may experience
from the market averages or from other more aggressive stock mutual funds. Your
Fund continues to offer much less volatility than the market indexes and, over
the last five and ten year periods ended September 30, 1999, has delivered
annualized total returns of 13.77% and 10.67%, respectively** on the Fund's
Class A shares.
In the portfolio managers' letter that follows, Lou Kirschbaum and David
Blount discuss the factors that influenced your Fund's performance over the
last year. I hope you find their comments helpful in understanding the
difficult circumstances that have faced conservative equity investors in the
recent reporting period.
Thank you for your continuing investment in Heritage Income-Growth Trust.
If there are ever ways in which you believe we could serve you better, please
call us at 800/709-3863. On behalf of all of us at Heritage, best wishes for a
happy and healthy holiday season.
Sincerely,
/s/ STEPHEN G. HILL
-------------------
Stephen G. Hill
President
- ---------
* These returns are calculated without the imposition of either front- or
back-end sales charges.
** Performance presented represents historical data. Past performance is no
guarantee of future results. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost. These returns are
calculated using a maximum front-end sales load of 4.75%.
<PAGE>
November 5, 1999
Dear Fellow Shareholders:
In our letter to you six months ago we noted a disconnect of historic
proportion between the Standard & Poor's 500 Composite Price Index (S&P 500)
and the vast body of publicly traded stocks. This dichotomy has continued since
we made those comments. Indeed, the chasm that separates the "haves" and
"have-nots" among individual stocks and market sectors has widened in the past
half year, as an increasingly narrow list of stocks has led the Index higher
while leaving most other stocks laboring in an extended bearish trend. As a
result, we are experiencing a valuation disparity the likes of which hasn't
been seen in nearly three decades.
The market leadership turned away from the "growth" style and toward a more
diverse group of value-oriented companies last spring, but this shift proved to
be short-lived as growth stocks reasserted themselves in the summer and fall.
In the most recent months, a few of the former growth leaders - including
Coca-Cola, Gillette, and Pfizer - have stalled, leaving the market nearly
entirely in the hands of technology stocks. Indeed, in the September quarter
the technology group was the only sector of the S&P 500 that produced positive
returns.
The S&P 500, against which most mutual funds are benchmarked, gained nearly 28%
in the past 12 months. The Value Line Index, which is broader than the S&P 500
(1600 stocks vs. 500) and isn't weighted by company size (as opposed to the S&P
500, which is weighted by market capitalization), gained only 9% in the past
year. Our Fund's performance was behind that of the Value Line Index.
The most important contributors on the positive side were, as you might expect,
nearly all securities that would fall into the "growth" category: Intimate
Brands, Omnicom, American Express, General Electric, Sysco, Alltel, and Time
Warner (held in the form of Houston Industries 7% preferred shares which are
exchangeable for Time Warner stock). Though in different industries, all of
these companies have produced consistently strong earnings growth, and the
market rewarded this.
Telecommunications stocks performed exceptionally well in the past year,
benefiting in part from a halo effect generated by the strength in most
technology-related issues. Alltel, GTE, and Williams Companies were standout
performers in this sector.
On the other side of the ledger, the list is longer. Three groups that were
down over the past 12 months are worth noting. Drug stocks, which had been
among the market's leaders for several years, have given ground in the past six
months despite continuing excellent earnings results. The concern that produced
this disparity stems from the increased volume of discussion in Washington
regarding the expansion of Medicare benefits to include prescription
pharmaceuticals. The "worst case" fear relates to the imposition of some sort
of price controls that would crimp drug company profit growth. As a result, the
drug group is trading at its most attractive valuation (relative to earning
power) since the early part of this decade, and we are maintaining the Fund's
exposure in this sector.
Another group worthy of discussion is the real estate investment trusts
(REITs), which a year ago comprised the largest single industry exposure in the
Fund's portfolio. Like the drugs, the stocks are down in spite of continuing
excellent operating results. Indeed, REIT cash flows are 11% to 12% higher
currently than a year ago. The stocks, however, have been under pressure
because the rate of growth has been decelerating. In a sort of circular logic,
the stocks have become so cheap (I.E., the cost of equity capital is so high)
that the spread between prospective investment returns and capital costs has
narrowed, reducing the opportunity for profitable real estate development
and/or acquisition. Unlike our treatment of the drug sector, we have reduced
the Fund's exposure in the REIT area-narrowing our focus to a small number of
the best positioned companies that still enjoy solid growth prospects even in a
more difficult financing environment.
<PAGE>
In addition, financial stocks and utilities generally were unrewarding
investments in the past 12 months, largely due to the sharp backup in interest
rates that took place during this period. Still, the stocks produced hearty
dividend yields, and most of our holdings in these sectors boosted their
payouts in the past 12 months, reflecting healthy financial positions and
management confidence in future growth prospects.
In formulating strategy, we continue to emphasize rising dividend streams and
discounted valuations in our investment selection process. We expect this
approach will produce worthwhile investment returns whenever the market places
more importance on long-term value creation.
Sincerely,
/s/ LOU KIRSCHBAUM /s/ DAVID BLOUNT
- ------------------ ----------------
Lou Kirschbaum David Blount
Senior Vice President Vice President
Eagle Asset Management, Inc. Eagle Asset Management, Inc.
Portfolio Manager, Income-Growth Trust Portfolio Manager, Income-Growth Trust
<PAGE>
GROWTH OF A $10,000 INVESTMENT
SINCE OCTOBER 1, 1989 OF HERITAGE INCOME-GROWTH TRUST
CLASS A SHARES
<TABLE>
<CAPTION>
HERITAGE STANDARD & POOR'S VALUE
INCOME-GROWTH 500 COMPOSITE STOCK LINE LIPPER
TRUST PRICE INDEX INDEX (GEOM.)*** AVERAGE**
$27,581 $47,326 $15,172 $31,046
------------- -------------------- ---------------- ----------
<S> <C> <C> <C> <C>
Oct-89 $ 9,525 $10,000 10,000 10,000
$ 9,281 $10,206 9,401 10,021
$ 8,742 $ 9,900 8,859 9,705
$ 8,969 $10,522 8,936 9,965
Sept-90 $ 7,961 $ 9,075 6,893 8,817
$ 8,259 $ 9,889 7,120 9,366
$ 9,380 $11,326 8,629 10,490
$ 9,559 $11,300 8,514 10,555
Sept-91 $10,247 $11,905 8,798 11,235
$11,059 $12,903 9,058 11,873
$11,016 $12,577 9,346 11,848
$11,085 $12,816 8,949 12,109
Sept-92 $11,622 $13,220 8,969 12,444
$12,353 $13,885 9,688 12,996
$12,842 $14,491 10,173 13,786
$12,867 $14,562 10,109 13,960
Sept-93 $13,533 $14,937 10,455 14,571
$13,727 $15,284 10,728 14,762
$13,379 $14,705 10,348 14,203
$13,371 $14,766 9,987 14,202
Sept-94 $13,777 $15,487 10,460 14,752
$13,606 $15,484 10,083 14,369
$14,484 $16,992 10,609 15,426
$15,261 $18,613 11,302 16,440
Sept-95 $16,473 $20,093 12,025 17,625
$17,399 $21,302 12,027 18,622
$18,618 $22,446 12,532 19,459
$19,595 $23,454 12,870 20,003
Sept-96 $20,140 $24,181 12,943 20,529
$21,312 $26,196 13,635 22,051
$21,761 $26,898 13,470 22,414
$24,012 $31,594 15,253 25,287
Sept-97 $26,072 $33,960 16,976 27,435
$27,053 $34,935 16,505 28,096
$29,079 $39,808 18,161 30,965
$28,507 $41,122 17,317 30,665
Sept-98 $25,984 $37,035 13,921 27,537
$28,047 $44,919 15,879 31,219
$28,176 $47,156 14,866 31,097
$30,117 $50,481 16,919 33,967
Sept-99 $27,581 $47,326 15,172 31,046
</TABLE>
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE INCOME-GROWTH TRUST
CLASS B SHARES ON JANUARY 2, 1998
<TABLE>
<CAPTION>
HERITAGE STANDARD & POOR'S VALUE
INCOME-GROWTH 500 COMPOSITE STOCK LINE LIPPER
TRUST PRICE INDEX INDEX (GEOM.)*** AVERAGE**
$ 9,656 $13,547 $ 9,192 $11,050
------------- -------------------- ---------------- ----------
<S> <C> <C> <C> <C>
Jan-98 $10,000 $10,000 10,000.00 10,000
Mar-98 $10,730 $11,395 11,003.00 11,021
Jun-98 $10,494 $11,771 10,491.36 10,914
Sep-98 $ 9,550 $10,601 8,434.00 9,801
Dec-98 $10,191 $12,858 9,620.67 11,111
Mar-99 $10,113 $13,498 9,006.87 11,068
Jun-99 $10,688 $14,450 10,250.72 12,089
Sep-99 $ 9,656 $13,547 9,191.82 11,050
</TABLE>
* Average annual returns for Heritage Income-Growth Trust Class A and B Shares
are calculated in conformance with item 21 of Form N-1A, which assumes the
maximum sales load of 4.75% for Class A Shares, a 4% contingent deferred
sales load for the complete redemption of Class B Shares and reinvestment of
dividends for Class A and B Shares. If Class B Shares were still held at the
end of the period, the value would be $10,058. Performance presented
represents historical data. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. The Fund's past performance
is not indicative of future performance and should be considered in light of
the Fund's investment policy and objectives, the characteristics and quality
of its portfolio securities, and the periods selected.
** The Lipper Average returns are the average of the Equity Income Funds
tracked by Lipper Analytical Services, Inc.
*** The Value Line Index does not include reinvestment of dividends.
3
<PAGE>
GROWTH OF A $10,000 INVESTMENT
SINCE INCEPTION OF HERITAGE INCOME-GROWTH TRUST
CLASS C SHARES ON APRIL 3, 1995
<TABLE>
<CAPTION>
HERITAGE STANDARD & POOR'S VALUE
INCOME-GROWTH 500 COMPOSITE STOCK LINE LIPPER
TRUST PRICE INDEX INDEX (GEOM.)*** AVERAGE**
$18,338 $27,852 $14,300 $20,132
------------- -------------------- ---------------- ----------
<S> <C> <C> <C> <C>
Apr-95 $10,000 $10,000 $10,000 $10,000
Jun-95 $10,500 $10,954 $10,653 $10,661
Sep-95 $11,318 $11,825 $11,335 $11,429
Dec-95 $11,944 $12,537 $11,336 $12,076
Mar-96 $12,746 $13,210 $11,812 $12,619
Jun-96 $13,399 $13,803 $12,131 $12,972
Sep-96 $13,736 $14,231 $12,200 $13,312
Dec-96 $14,511 $15,416 $12,852 $14,300
Mar-97 $14,787 $15,830 $12,696 $14,535
Jun-97 $16,297 $18,593 $14,377 $16,398
Sep-97 $17,649 $19,986 $16,001 $17,791
Dec-97 $18,282 $20,560 $15,558 $18,220
Mar-98 $19,616 $23,428 $17,118 $20,080
Jun-98 $19,184 $24,201 $16,322 $19,885
Sep-98 $17,459 $21,795 $13,121 $17,857
Dec-98 $18,810 $26,435 $14,967 $20,244
Mar-99 $18,860 $27,752 $14,012 $20,165
Jun-99 $20,125 $29,708 $15,948 $22,027
Sep-99 $18,388 $27,852 $14,300 $20,132
</TABLE>
* Average annual returns for Heritage Income-Growth Trust Class C Shares are
calculated in conformance with item 21 of Form N-1A, which assumes
reinvestment of dividends for Class C Shares. Performance presented
represents historical data. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their original cost. The Fund's past performance
is not indicative of future performance and should be considered in light of
the Fund's investment policy and objectives, the characteristics and quality
of its portfolio securities, and the periods selected.
** The Lipper Average returns are the average of the Equity Income Funds
tracked by Lipper Analytical Services, Inc.
*** The Value Line Index does not include reinvestment of dividends.
4
<PAGE>
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
INVESTMENT PORTFOLIO
SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ---------- -------------
<S> <C> <C>
COMMON STOCKS--76.4%(a)
=======================
ADVERTISING/COMMUNICATIONS--3.8%
- ----------------------------------
45,000 Omnicom Group, Inc. .................. $3,563,437
----------
AUTO/TRUCK MANUFACTURERS--1.0%
- --------------------------------
19,000 Ford Motor Company ................... 953,563
----------
BANKING--6.6%
- ---------------
10,000 Bank of America Corporation .......... 556,875
15,000 Bank One Corporation ................. 522,188
30,800 Fleet Boston Corporation ............. 1,128,050
15,100 Jefferson-Pilot Corporation,
ACES ................................. 1,381,650
75,000 Mellon Bank Corporation .............. 2,531,250
----------
6,120,013
----------
BEVERAGES--1.7%
- -----------------
54,000 PepsiCo, Inc. ........................ 1,633,500
----------
CONGLOMERATES/DIVERSIFIED--4.6%
- ----------------------------------
26,800 General Electric Company ............. 3,177,475
39,600 Harsco Corporation ................... 1,093,950
----------
4,271,425
----------
FINANCE--2.8%
- ---------------
12,000 American Express Company ............. 1,615,500
18,600 Freddie Mac .......................... 967,200
----------
2,582,700
----------
FOOD--5.1%
- ------------
37,000 H.J. Heinz Company ................... 1,591,000
92,000 Sysco Corporation .................... 3,225,750
----------
4,816,750
----------
HOUSEWARES--1.8%
- ------------------
60,000 Newell Rubbermaid Inc. ............... 1,713,750
----------
INSURANCE--1.5%
- -----------------
5,000 Marsh & McLennan Companies,
Inc. ................................. 342,500
38,300 SAFECO Corporation ................... 1,072,400
----------
1,414,900
----------
INVESTMENT COMPANY--1.1%
- --------------------------
52,446 Security Capital Preferred
Growth (b) ........................... 1,060,990
----------
MANUFACTURING/DISTRIBUTIONS--1.3%
- ----------------------------------
50,900 Pall Corporation ..................... 1,180,243
----------
OIL & GAS--7.6%
- -----------------
36,000 Baker Hughes Inc. .................... 1,044,000
27,308 British Petroleum Company, PLC,
Sponsored ADR ........................ 3,026,068
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ----------- ------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
=========================
OIL & GAS (CONTINUED)
- -----------------------
30,000 Mobil Corporation .................. 3,022,500
----------
7,092,568
----------
PHARMACEUTICAL--9.0%
- -----------------------
39,000 American Home Products
Corporation ........................ 1,618,500
15,000 Bristol-Myers Squibb Company ....... 1,012,500
15,000 Merck & Company, Inc. .............. 972,188
20,000 Pharmacia & Upjohn, Inc. ........... 992,500
48,000 Schering-Plough Corporation ........ 2,094,000
27,000 Warner-Lambert Company ............. 1,792,125
----------
8,481,813
----------
REAL ESTATE INVESTMENT TRUST--5.5%
- ------------------------------------
45,000 Boston Properties Inc. ............. 1,380,938
60,000 Center Trust Inc. .................. 667,500
53,900 Public Storage, Inc. ............... 1,357,606
38,800 Simon Property Group, Inc. ......... 870,575
25,000 Sun Communities, Inc. .............. 826,562
----------
5,103,181
----------
RETAIL STORES--3.2%
- ---------------------
76,650 Intimate Brands, Inc. .............. 2,984,559
----------
TELECOMMUNICATIONS--8.0%
- -------------------------
55,000 ALLtel Corporation ................. 3,870,625
47,500 GTE Corporation .................... 3,651,563
----------
7,522,188
----------
TEXTILES--0.4%
- ----------------
25,000 Shaw Industries, Inc. .............. 396,875
----------
TOBACCO--0.9%
- ---------------
25,500 Philip Morris Companies, Inc....... 871,781
----------
UTILITIES-ELECTRIC--2.2%
- --------------------------
93,600 Sierra Pacific Resources ........... 2,082,600
----------
UTILITIES-GAS--5.9%
- ---------------------
92,000 UGI Corporation .................... 2,139,000
86,000 Wicor, Inc. ........................ 2,499,375
25,000 Williams Companies, Inc. ........... 935,937
----------
5,574,312
----------
UTILITIES-WATER--2.4%
- -----------------------
79,000 American Water Works Company,
Inc. ............................... 2,286,063
----------
Total Common Stocks (cost $59,038,948).......... 71,707,211
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
INVESTMENT PORTFOLIO
SEPTEMBER 30, 1999
(CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- -------------
<S> <C> <C>
CONVERTIBLE BONDS--8.4%(a)
===========================
AUTO PARTS/EQUIPMENT--2.8%
- ---------------------------
$ 2,570,000 Magna International, Inc.,
5.0%, 10/15/02 ............. $2,570,000
----------
INTERNET--0.6%
- ----------------
500,000 Safeguard Scientifics, Inc.,
5.0%, 06/15/06 ............. 553,125
----------
PHARMACEUTICAL--1.1%
- ----------------------
900,000 Alpharma Inc.,
3.0%, 06/01/06 ............. 1,067,625
----------
SERVICES--1.9%
- ----------------
1,800,000 Interim Services, Inc.,
4.5%, 06/01/05 ............. 1,424,250
500,000 Personnel Group of America,
5.75%, 07/01/04 ............ 352,500
----------
1,776,750
----------
TELECOMMUNICATIONS--2.0%
- --------------------------
2,000,000 Telephonos de Mexico, SA,
4.25%, 06/15/04 ............ 1,895,000
----------
Total Convertible Bonds
(cost $7,966,765)....................... 7,862,500
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- ---------- ------------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS--13.6%(a)
=======================================
CHEMICALS--0.9%
- -----------------
1,000 Hercules Inc., Trust II, 6.5% ...... 845,000
-------
COSMETICS/TOILETRIES--1.0%
- ----------------------------
12,000 Estee Lauder TRACES, 6.25% ......... 936,000
-------
FOOD--1.5%
- ------------
30,500 Ralston Purina Company, 7.0% ....... 1,433,500
---------
FOOD SERVING--2.5%
- --------------------
42,000 Wendy's Financing,
Series "A", 5.0% ................... 2,373,000
---------
OIL & GAS--1.1%
- -----------------
30,000 MCN Financing III, 8.0% ............ 945,000
---------
RETAIL STORES--1.1%
- ---------------------
20,000 Kmart Financing
Corporation, 7.75% ................. 952,500
---------
SERVICES--1.0%
- ----------------
25,000 Carriage Services, Inc., 7.0% ...... 900,000
---------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------- --------
<S> <C>
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
========================================
UTILITIES-ELECTRIC--3.0%
- ---------------------------
28,000 Houston Industries, Inc., 7.0% ...... 2,856,000
----------
UTILITIES-GAS--1.5%
- -----------------------
8,200 Williams Companies, Inc., $3.50...... 1,445,250
----------
Total Convertible Preferred Stocks
(cost $12,069,946)............................ 12,686,250
----------
Total Investment Portfolio excluding
repurchase agreement
(cost $79,075,659)............................ 92,255,961
REPURCHASE AGREEMENT--0.8%(a)
=============================
Repurchase Agreement with State Street
Bank and Trust Company, dated
September 30, 1999 @ 5.16% to be
repurchased at $789,113 on
October 1, 1999, collateralized by
$790,000 United States Treasury Notes,
6.38% due August 15, 2002,(market value
$809,380 including interest)
(cost $789,000) .............................. 789,000
----------
TOTAL INVESTMENT PORTFOLIO
(cost $79,864,659)(c), 99.2%(a)............... 93,044,961
OTHER ASSETS AND LIABILITIES, net, 0.8% (a) .... 779,945
----------
NET ASSETS, 100.0% .............................$ 93,824,906
============
</TABLE>
- ----------
(a) Percentages indicated are based on net assets.
(b) Private placement securities are fair valued according to procedures
adopted by the Board of Trustees.
(c) The aggregate identified cost for federal income tax purposes is
substantially the same. Market value includes net unrealized appreciation
of $13,180,302 which consists of aggregate gross unrealized appreciation
for all securities in which there is an excess of market value over tax
cost of $20,350,641 and aggregate gross unrealized depreciation for all
securities in which there is an excess of tax cost over market value of
$7,170,339.
ACES -- Adjustable Convertible Extendable Securities
ADR -- American Depository Receipt
TRACES -- Trust Automatic Common Exchangeable Securities
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS
- ------
Investments, at market value (identified cost $79,075,659) (Note 1) ...................... $ 92,255,961
Repurchase agreement (identified cost $789,000) (Note 1) ................................. 789,000
Cash ..................................................................................... 938
Receivables:
Investments sold ........................................................................ 1,276,532
Fund shares sold ........................................................................ 38,544
Dividends and interest .................................................................. 347,546
Deferred state qualification expenses (Note 1) ........................................... 9,230
Prepaid insurance (Note 1) ............................................................... 2,480
------------
Total Assets ......................................................................... 94,720,231
LIABILITIES
- -----------
Payables (Note 4):
Investments purchased ................................................................... $ 338,495
Fund shares redeemed .................................................................... 373,616
Accrued management fee .................................................................. 59,789
Accrued distribution fee ................................................................ 41,402
Other accrued expenses .................................................................. 82,023
------------
Total Liabilities .................................................................... 895,325
------------
Net assets, at market value .............................................................. $ 93,824,906
============
NET ASSETS
- ----------
Net assets consist of:
Paid-in capital ......................................................................... $ 81,567,423
Undistributed net investment income (Note 1) ............................................ 568,622
Accumulated net realized loss (Notes 1 and 5) ........................................... (1,491,441)
Net unrealized appreciation on investments .............................................. 13,180,302
------------
Net assets, at market value .............................................................. $ 93,824,906
============
CLASS A SHARES
- --------------
Net asset value and redemption price per share ($60,155,339 divided by
4,024,808 shares of beneficial interest outstanding, no par value) (Notes 1 and 2) ...... $ 14.95
============
Maximum offering price per share (100/95.25 of $14.95) ................................... $ 15.70
============
CLASS B SHARES
- --------------
Net asset value, offering price and redemption price per share ($7,323,460 divided by
496,092 shares of beneficial interest outstanding, no par value) (Notes 1 and 2) ........ $ 14.76
============
CLASS C SHARES
- --------------
Net asset value, offering price and redemption price per share ($26,346,107 divided by
1,785,095 shares of beneficial interest outstanding, no par value) (Notes 1 and 2) ...... $ 14.76
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT INCOME
- -----------------
<S> <C> <C>
Income:
Dividends ........................................................... $ 3,116,158
Interest ............................................................ 542,182
------------
Total Income ....................................................... 3,658,340
Expenses (Notes 1 and 4):
Management fee ...................................................... $783,838
Distribution fee (Class A Shares) ................................... 169,757
Distribution fee (Class B Shares) ................................... 77,235
Distribution fee (Class C Shares) ................................... 300,751
Shareholder servicing fees .......................................... 85,197
Custodian/Fund accounting fees ...................................... 74,181
Professional fees ................................................... 57,466
State qualification expenses ........................................ 39,948
Reports to shareholders ............................................. 21,465
Trustees' fees and expenses ......................................... 8,987
Insurance ........................................................... 5,420
Other ............................................................... 926
--------
Total expenses ..................................................... 1,625,171
------------
Net investment income ................................................ 2,033,169
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENT
- ------------------------------------------
Net realized loss from investment transactions ....................... (1,229,509)
Net realized loss from covered call options written (Note 1) ......... (165,980)
Net unrealized appreciation of investments during the year ........... 5,946,965
------------
Net gain on investments ........................................... 4,551,476
------------
Net increase in net assets resulting from operations ................. $ 6,584,645
============
</TABLE>
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
----------------------------------------
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
------------------- --------------------
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income ............................................................... $ 2,033,169 $ 2,068,519
Net realized gain (loss) from investment transactions ............................... (1,229,509) 4,966,952
Net realized gain (loss) from covered call options written .......................... (165,980) 200,372
Net unrealized appreciation (depreciation) of investments during the year ........... 5,946,965 (9,184,879)
------------- ------------
Net increase (decrease) in net assets resulting from operations ..................... 6,584,645 (1,949,036)
Distributions to shareholders from:
Net investment income Class A Shares, ($ 0.33 and $0.32 per share, respectively)..... (1,463,165) (1,348,467)
Net investment income Class B Shares, ($0.22 and $0.11* per share, respectively)..... (108,120) (25,194)
Net investment income Class C Shares, ($ 0.22 and $0.21 per share, respectively)..... (444,443) (365,109)
Net realized gains Class A Shares, ($ 0.62 and $1.33 per share, respectively) ....... (2,792,348) (5,225,121)
Net realized gains Class B Shares, ($ 0.62 per share) ............................... (294,751) --
Net realized gains Class C Shares, ($ 0.62 and $1.33 per share, respectively) ....... (1,257,716) (1,955,616)
Increase (decrease) in net assets from Fund share transactions (Note 2) .............. (11,432,965) 30,771,013
------------- ------------
Increase (decrease) in net assets .................................................... (11,208,863) 19,902,470
Net assets, beginning of year ........................................................ 105,033,769 85,131,299
------------- ------------
Net assets, end of year (including undistributed net investment income of $568,622
and $431,852, respectively) ........................................................ $ 93,824,906 $105,033,769
============= ============
</TABLE>
- ----------
* For the period January 2, 1998 (commencement of Class B Shares) to
September 30, 1998.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements.
<TABLE>
<CAPTION>
CLASS A SHARES
-----------------------------------------------------------
FOR THE YEARS ENDED
SEPTEMBER 30
-----------------------------------------------------------
1999 * 1998 * 1997 * 1996 1995
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ......... $ 14.99 $ 16.65 $ 14.67 $ 12.56 $ 11.33
-------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income ...................... 0.34 0.36 0.40 0.36 0.27
Net realized and unrealized gain (loss)
on investments ............................ 0.57 ( 0.37) 3.45 2.35 1.79
-------- -------- -------- -------- --------
Total from Investment Operations ........... 0.91 ( 0.01) 3.85 2.71 2.06
-------- -------- -------- -------- --------
Less Distributions:
Dividends from net investment income ...... ( 0.33) ( 0.32) ( 0.38) ( 0.35) ( 0.34)
Distributions from net realized gains ..... ( 0.62) ( 1.33) ( 1.49) ( 0.25) ( 0.49)
-------- -------- -------- -------- --------
Total Distributions ....................... ( 0.95) ( 1.65) ( 1.87) ( 0.60) ( 0.83)
-------- -------- -------- -------- --------
Net asset value, end of year ............... $ 14.95 $ 14.99 $ 16.65 $ 14.67 $ 12.56
======== ======== ======== ======== ========
Total Return (%) (a) ....................... 6.14 ( 0.34) 29.45 22.26 19.57
Ratios (%)/ Supplemental Data:
Operating expenses, net, to average
daily net assets .......................... 1.27 1.29 1.34 1.51 1.64
Net investment income (loss) to average
daily net assets .......................... 2.19 2.24 2.65 2.66 4.63
Portfolio turnover rate .................... 46 66 75 75 42
Net assets, end of year ($ millions) ....... 60 68 65 43 34
<CAPTION>
CLASS B SHARES
------------------------------
FOR THE YEARS ENDED
SEPTEMBER 30
------------------------------
1999 * 1998 */dagger/
----------- ------------------
<S> <C> <C>
Net asset value, beginning of year ......... $ 14.82 $ 15.62
-------- ----------
Income from Investment Operations:
Net investment income ...................... 0.22 0.19
Net realized and unrealized gain (loss)
on investments ............................ 0.56 ( 0.88)
-------- ----------
Total from Investment Operations ........... 0.78 ( 0.69)
-------- ----------
Less Distributions:
Dividends from net investment income ...... ( 0.22) ( 0.11)
Distributions from net realized gains ..... ( 0.62) --
-------- ----------
Total Distributions ....................... ( 0.84) ( 0.11)
-------- ----------
Net asset value, end of year ............... $ 14.76 $ 14.82
======== ==========
Total Return (%) (a) ....................... 5.32 ( 4.50) (b)
Ratios (%)/ Supplemental Data:
Operating expenses, net, to average
daily net assets .......................... 2.02 2.04 (c)
Net investment income (loss) to average
daily net assets .......................... 1.44 1.75 (c)
Portfolio turnover rate .................... 46 66
Net assets, end of year ($ millions) ....... 7 6
<CAPTION>
CLASS C SHARES
--------------------------------------------------------------------
FOR THE YEARS ENDED
SEPTEMBER 30
--------------------------------------------------------------------
1999 * 1998 * 1997 * 1996 1995/double dagger/
----------- ----------- ----------- ----------- --------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ......... $ 14.82 $ 16.49 $ 14.57 $ 12.51 $ 11.21
-------- -------- -------- -------- ---------
Income from Investment Operations:
Net investment income ...................... 0.22 0.25 0.28 0.26 0.18
Net realized and unrealized gain (loss)
on investments ............................ 0.56 ( 0.38) 3.43 2.34 1.28
-------- -------- -------- -------- ---------
Total from Investment Operations ........... 0.78 ( 0.13) 3.71 2.60 1.46
-------- -------- -------- -------- ---------
Less Distributions:
Dividends from net investment income ...... ( 0.22) ( 0.21) ( 0.30) ( 0.29) ( 0.16)
Distributions from net realized gains ..... ( 0.62) ( 1.33) ( 1.49) ( 0.25) --
-------- -------- -------- -------- ---------
Total Distributions ....................... ( 0.84) ( 1.54) ( 1.79) ( 0.54) ( 0.16)
-------- -------- -------- -------- ---------
Net asset value, end of year ............... $ 14.76 $ 14.82 $ 16.49 $ 14.57 $ 12.51
======== ======== ======== ======== =========
Total Return (%) (a) ....................... 5.32 ( 1.08) 28.49 21.37 13.18 (b)
Ratios (%)/ Supplemental Data:
Operating expenses, net, to average
daily net assets .......................... 2.02 2.04 2.07 2.13 2.40 (c)
Net investment income (loss) to average
daily net assets .......................... 1.44 1.51 1.87 2.05 4.61 (c)
Portfolio turnover rate .................... 46 66 75 75 42
Net assets, end of year ($ millions) ....... 26 31 21 6 2
<FN>
- -------
* Per share amounts have been calculated using the monthly average share method.
/dagger/ For the period January 2, 1998 (commencement of Class B Shares) to September 30, 1998.
/double dagger/ For the period April 3, 1995 (commencement of Class C Shares) to September 30, 1995.
(a) Does not reflect the imposition of a sales charge.
(b) Not annualized.
(c) Annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
Note 1: SIGNIFICANT ACCOUNTING POLICIES. Heritage Income-Growth Trust (the
"Fund") is organized as a Massachusetts business trust and is
registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. The Fund's
investment objective is long-term total return by seeking, with
approximately equal emphasis, current income and capital appreciation.
The Fund currently issues Class A, Class B and Class C Shares. Class A
Shares are sold subject to a maximum sales charge of 4.75% of the
amount invested payable at the time of purchase. Class B Shares, which
were offered to shareholders beginning January 2, 1998, are sold
subject to a 5% maximum contingent deferred sales load (based on the
lower of purchase price or redemption price), declining over a six year
period. Class C Shares, which were offered to shareholders beginning
April 3, 1995, are sold subject to a contingent deferred sales charge
of 1% of the lower of net asset value or purchase price payable upon
any redemption made in less than one year of purchase. The preparation
of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual
results could differ from those estimates. The following is a summary
of significant accounting policies:
SECURITY VALUATION: The Fund values investment securities at market
value based on the last quoted sales price as reported by the principal
securities exchange on which the security is traded. If no sale is
reported, market value is based on the last bid and in the absence of a
market quote, securities are valued using such methods as the Board of
Trustees believe would reflect fair market value. Short-term
investments having a maturity of 60 days or less are valued at
amortized cost, which approximates market.
REPURCHASE AGREEMENTS: The Fund enters into repurchase agreements
whereby the Fund, through its custodian, receives delivery of the
underlying securities, the market value of which at the time of
purchase is required to be an amount equal to at least 100% of the
resale price.
FEDERAL INCOME TAXES: The Fund's policy is to comply with the
requirements of the Internal Revenue Code of 1986, as amended, which
are applicable to regulated investment companies and to distribute
substantially all of its taxable income to its shareholders.
Accordingly, no provision has been made for federal income and excise
taxes.
DISTRIBUTION OF INCOME AND GAINS: Distributions of net investment
income are made quarterly. Net realized gains from investment
transactions during any particular year in excess of available capital
loss carryforwards, which, if not distributed, would be taxable to the
Fund, will be distributed to shareholders in the following fiscal year.
The Fund uses the identified cost method for determining realized gain
or loss on investments for both financial and federal income tax
reporting purposes.
EXPENSES: The Fund is charged for those expenses that are directly
attributable to it, such as management fee, custodian/fund accounting
fees, distribution fee, etc., while other expenses such as insurance
expense, is allocated proportionately among the other Heritage Mutual
funds. Expenses of the Fund are allocated to each class of shares based
upon their relative percentage of current net assets. All expenses that
are directly attributable to a specific class of shares, such as
distribution fees, are charged directly to that class.
STATE QUALIFICATION EXPENSES: State qualification fees are amortized
based either on the time period covered by the qualification or as
related shares are sold, whichever is appropriate for each state.
OPTIONS: When the Fund writes a covered call option, the Fund receives
a premium on the sale of an option, but gives up the opportunity to
profit from any increase in stock value above the exercise price of the
option. If an option that the Fund has written either expires on its
stipulated expiration date, or the Fund enters into a closing purchase
transaction, the Fund realizes a gain (or loss if the cost of a closing
purchase transaction exceeds the premium received when the option was
sold) without regard to any unrealized gain or loss on the underlying
security, and the liability related to such option is extinguished. If
a call option that the Fund has written is exercised, the Fund realizes
a capital gain or loss from the sale of the underlying security, and
the proceeds from such sale are increased by the premium originally
received. The amount equal to the premium received by the Fund is
included in the Fund's Statement of Assets and Liabilities as an asset
and as an equivalent liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of
the option written. The current market value of a written option is the
last offering price on the principal exchange on which such option is
traded.
CAPITAL ACCOUNTS: The Fund reports the undistributed net investment
income and accumulated net realized gain (loss) accounts on a basis
approximating amounts available for future tax distributions (or to
offset future taxable realized gains when a capital loss carryforward
is available). Accordingly, the Fund may periodically make
reclassifications among certain capital accounts without impacting the
net asset value of the Fund.
OTHER: For purposes of these financial statements, investment security
transactions are accounted for on a trade date basis. Dividend income
and distributions to shareholders are recorded on the ex-dividend date.
Interest income is recorded on the accrual basis. All original issue
discounts are accreted for both tax and financial reporting purposes.
10
<PAGE>
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Note 2: FUND SHARES. At September 30, 1999, there were an unlimited number of
shares of beneficial interest of no par value authorized.
Transactions in Class A, B and C Shares of the Fund during the year ended
September 30, 1999, were as follows:
CLASS A SHARES
FOR THE YEAR ENDED SEPTEMBER 30, 1999 --------------------------------
SHARES AMOUNT
--------------- ----------------
Shares sold . ....................... 352,146 $ 5,409,671
Shares issued on reinvestment of
distributions ..................... 262,944 3,959,739
Shares redeemed . ................... (1,124,477) (17,366,124)
---------- -------------
Net increase (decrease) ............. (509,387) $ (7,996,714)
=============
Shares outstanding:
Beginning of year .................. 4,534,195
----------
End of year ........................ 4,024,808
==========
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
FOR THE YEAR ENDED SEPTEMBER 30, 1999 ---------------------------- ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------- ----------------
<S> <C> <C> <C> <C>
Shares sold . ....................... 187,430 $ 2,858,535 299,442 $ 4,572,257
Shares issued on reinvestment of
distributions ..................... 25,683 381,864 110,089 1,634,529
Shares redeemed . ................... (154,048) (2,357,700) (688,824) (10,525,736)
-------- ------------ -------- -------------
Net increase (decrease) ............. 59,065 $ 882,699 (279,293) $ (4,318,950)
============ =============
Shares outstanding:
Beginning of year .................. 437,027 2,064,388
-------- ---------
End of year ........................ 496,092 1,785,095
======== =========
</TABLE>
Transactions in Class A and C Shares of the Fund during the year ended
September 30, 1998 and Class B Shares from January 2, 1998 (commencement
of Class B Shares) to September 30, 1998, were as follows:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES CLASS C SHARES
FOR THE YEAR ENDED SEPTEMBER 30, 1998 ----------------------------- --------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------------- --------------- ------------ -------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold . .................... 917,869 $ 14,911,435 471,494 $ 7,619,757 1,149,224 $ 18,505,769
Shares issued on reinvestment of
distributions .................. 390,257 6,102,092 1,428 23,670 146,465 2,263,138
Shares redeemed .................. (654,456) (10,638,818) (35,895) (573,754) (474,527) (7,442,276)
-------- ------------- ------- ----------- --------- ------------
Net increase ..................... 653,670 $ 10,374,709 437,027 $ 7,069,673 821,162 $ 13,326,631
============= =========== ============
Shares outstanding:
Beginning of year ............... 3,880,525 -- 1,243,226
--------- ------- ---------
End of year . ................... 4,534,195 437,027 2,064,388
========= ======= =========
</TABLE>
Note 3: PURCHASES AND SALES OF SECURITIES. For the year ended September 30,
1999, purchases and sales of investment securities (excluding repurchase
agreements) aggregated $46,701,287 and $58,830,342, respectively.
Transactions in covered call options written on equity securities were as
follows:
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
----------- -------------
Outstanding September 30, 1998 ............ 440 $ 195,233
Written .................................. 2,411 821,529
Closed ................................... (1,634) (582,422)
Exercised ................................ (612) (239,957)
Expired .................................. (715) (194,383)
Corporate Actions (stock splits) ......... 110 --
------ ----------
Outstanding September 30, 1999 ............ 0 $ 0
====== ==========
Note 4: MANAGEMENT, SUBADVISORY, DISTRIBUTION, SHAREHOLDER SERVICING AGENT,
FUND ACCOUNTING AND TRUSTEES FEES. Under the Fund's Investment Advisory
and Administration Agreement with Heritage Asset Management, Inc. (the
"Manager"), the Fund agrees to pay to the Manager a fee equal to an
annualized rate of 0.75% of the first $100,000,000 of the Fund's average
daily net assets, and 0.60% of any excess over $100,000,000 of such net
assets, computed daily and payable monthly. Pursuant to the current
registration statement dated January 4, 1999, the Manager has agreed to
waive its fees and, if necessary, reimburse the Fund to the extent that
Class A annual operating expenses exceed 1.35% of the Class A Share
average daily net assets and to the extent that the Class B and Class C
annual operating expenses each exceed 2.10% of that classes' average
daily net assets for the fiscal year ended September 30, 1999. Under
these agreements, no fees were waived and no expenses were reimbursed
for the year ended September 30, 1999.
The Manager has entered into an agreement with Eagle Asset Management,
Inc. (the "Subadviser") for the Subadviser to provide to the Fund
investment advice, portfolio management services (including the
placement of brokerage orders) and certain compliance and other
services for a fee payable by the Manager equal to 50% of the fees
payable by the Fund to
11
<PAGE>
- --------------------------------------------------------------------------------
HERITAGE INCOME-GROWTH TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
the Manager without regard to any reduction due to the imposition of
expense limitations. For the year ended September 30, 1999 the
Subadviser earned $391,919 for subadviser fees, which was paid by the
Manager.
The Manager also is the Dividend Paying and Shareholder Servicing Agent
for the Fund. The amount payable to the Manager for such expenses as of
September 30, 1999 was $21,000. In addition, the Manager performs Fund
accounting services and charged $51,947 during the current year of
which $14,400 was payable as of September 30, 1999.
Raymond James & Associates, Inc. (the "Distributor") has advised the
Fund that it received $111,599 in front-end sales charges for Class A
Shares, $47,492 in contingent deferred sales charges for Class B Shares
and $12,921 in contingent deferred sales charges for Class C Shares for
the year ended September 30, 1999. From these fees, the Distributor
paid commissions to salespersons and incurred other distribution costs.
Agency brokerage commissions for the same period aggregated $130,655 of
which $8,058 was paid to Raymond James & Associates, Inc.
Pursuant to the Class A Distribution Plan adopted in accordance with
Rule 12b-1 of the Investment Company Act of 1940, as amended, the Fund
is authorized to pay the Distributor a fee equal to .25% of the average
daily net assets for Class A Shares. The Class B and Class C Share
Distribution Plans provide for payments at an annual rate of up to
1.00% of average daily net assets for Class B and Class C Shares,
respectively. Such fees are accrued daily and payable monthly. Class B
Shares will convert to Class A Shares eight years after the end of the
calendar month in which the shareholder's order to purchase was
accepted. The Manager, Distributor, Fund Accountant and Shareholder
Servicing Agent are all wholly owned subsidiaries of Raymond James
Financial, Inc.
Trustees of the Fund also serve as Trustees for Heritage Cash Trust,
Heritage Capital Appreciation Trust, Heritage Income Trust, Heritage
Series Trust and Heritage U.S. Government Income Fund, investment
companies that are also advised by the Manager of the Trust
(collectively called the Heritage mutual funds). Each Trustee of the
Heritage mutual funds who is not an employee of the Manager or employee
of an affiliate of the Manager receives an annual fee of $8,666 and an
additional fee of $3,250 for each combined quarterly meeting of the
Heritage mutual funds attended. Trustees' fees and expenses are shared
equally by each portfolio in the Heritage mutual funds.
Note 5: FEDERAL INCOME TAXES. For the year ended September 30, 1999, to reflect
reclassifications arising from permanent book/tax differences primarily
attributable to distributions from Real Estate Investment Trusts, the
Fund credited undistributed net investment income $119,329, and charged
paid in capital $110,751 and accumulated net realized gain $8,578. The
Fund has a net tax basis capital loss carryforward of $1,084,451, which
may be applied against any realized net taxable gains until its
expiration date of September 30, 2007.
12
<PAGE>
- --------------------------------------------------------------------------------
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Board of Trustees and Shareholders of
Heritage Income-Growth Trust
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Heritage Income-Growth Trust (the
"Fund") at September 30, 1999, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the periods presented, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at September 30, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
- -------------------------------
PricewaterhouseCoopers LLP
Tampa, Florida
November 12, 1999
- --------------------------------------------------------------------------------
1999 FEDERAL INCOME TAX NOTICE
- --------------------------------------------------------------------------------
During the year ended September 30, 1999, the Fund paid to shareholders
$4,344,815 or $0.62 per share from long-term capital gains. For such period
100% of the income dividends qualified for the dividend received deduction
available to corporations.
13
<PAGE>
HERITAGE FAMILY OF FUNDS(TM)
FROM OUR FAMILY TO YOURS: THE INTELLIGENT CREATION OF WEALTH.
HERITAGE STOCK FUNDS
Aggressive Growth
Capital Appreciation
Growth Equity
Income-Growth
International
Mid Cap
Small Cap
Technology
Value Equity
HERITAGE BOND FUNDS
High Yield
Intermediate Government
HERITAGE MONEY MARKET FUNDS
Money Market
Municipal Money Market
We are pleased that many of you are also investors in these funds. For more
information and a prospectus for any of these mutual funds, please contact your
financial advisor. Please read the prospectus carefully before you invest in any
of the funds.
This report is for the information of shareholders of Heritage Income-Growth
Trust. It may also be used as sales literature when preceded or accompanied by
a prospectus.
(C) 1999 Heritage Asset Management, Inc.
8M 9/99 Printed on recycled paper
AR5314-IG
[LOGO] Heritage Income-Growth Trust
P.O. Box 33022
St. Petersburg, FL 33733
- -------------------------------------------------------------------------------
ADDRESS SERVICE REQUESTED
